Conagra warns inflation will take bigger bite out of margins

 

Reporting by Deborah Sophia in Bengaluru; Editing by Aditya Soni, Reuters

via Yahoo Sport - 6 January 2022

 

(Reuters) - Conagra Brands Inc on Thursday warned of a bigger hit to full-year margins from surging raw material costs and shipping expenses despite prices hikes by the Chef Boyardee pasta maker.

 

The company lowered its forecast for annual adjusted operating margin to around 15.5% from 16% and also missed market expectations for quarterly profit, sending its shares down 4%.

 

Packaged food companies have in recent months reeled under soaring prices of commodities such as wheat and resin, while an overburdened supply chain has driven up their freight costs.

 

"We expect to continue experiencing cost pressures above original expectations in the second half of fiscal 2022," Chief Executive Officer Sean Connolly said in a statement.

 

The Duncan Hines cake mixes maker expects gross inflation to be 14% for the year, higher than its previous view of about 11%.

 

The company said it brought in another round of price increases during December...

 

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